Pearson Backs 2018 Guidance as 1st Half Underlying Profit Grows

By Adam Clark

Pearson PLC (PSON.LN) said Friday that its underlying profit and revenue rose in the first half, but that it continues to expect a decline in its U.S. higher education business due to market pressures.

The FTSE 100-listed education company said its adjusted operating profit for the half came to 107 million pounds ($140.2 million). This was flat from the year-earlier half but up 46% on an underlying basis, which excludes currency movement, portfolio changes and new accounting rules.

Sales dropped to GBP1.87 billion from GBP2.05 billion, but Pearson said that this represented 2% underlying growth. On a statutory basis, Pearson swung to a pretax profit of GBP202 million from a loss of GBP10 million, due to the sales of its Wall Street English and Utel businesses.

In North America, Pearson's largest market, underlying revenue rose 3%. Pearson said its struggling U.S. Higher Education Courseware business increased revenue modestly, but it continues to expect a decline in net sales in the second half.

Pearson said its 2018 expectations remain unchanged, having previously guided for an adjusted operating profit of between GBP520 million and GBP560 million pounds for the full year, including businesses held for sale.

The company said it remains on track to deliver cost savings of GBP300 million per annum, with the full benefits being felt from the end of 2019 onwards.

The company declared an interim dividend of 5.5 pence, up from 5.0p the prior year.

Write to Adam Clark at [e-mail]; @AdamDowJones

(END) Dow Jones Newswires

July 27, 2018 02:50 ET (06:50 GMT)

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